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Central Bank of Chile

Central Bank of Chile

February 2, 2018

There were four Chilean central bank interest rate cuts in 2017, each by 25 basis points and all done by May. The key rate has been at 2.5%, and officials unanimously decided to it there at the first policy review of 2018. A statement was released afterwards that leaves the door open to possible more easing. The peso since the last Board meeting has been stronger than assumed, and that could delay the convergence of inflation on the target midpoint of 3% from 2% where such has lately hovered. “the Board will pay special attention to any signs of a delay in the convergence of inflation that might warrant an additional monetary impulse. It also reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.” Financial conditions remain favorable, and growth of late has slightly exceeded expectations.